Telecoms go tactical
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E-mail China.org.cn, May 16, 2013
![Ren Zhengfei, the founder of Chinese telecommunications giant Huawei. [File Photo]](http://images.china.cn/attachement/jpg/site1007/20130516/001ec949c22b12fe86c502.jpg "Ren Zhengfei, the founder of Chinese telecommunications giant Huawei. [File Photo]") |
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Ren Zhengfei, the founder of Chinese telecommunications giant Huawei. [File Photo] |
The answer lies in tactics. In Ren's own words, "New Zealand is one of Huawei's most important strategic markets" and in recent years, Huawei has made several breakthroughs there, becoming a major supplier for the New Zealand government's nationwide Ultra-Fast Broadband (UFB) initiative and Telecom New Zealand's 4G mobile phone network. Huawei New Zealand's annual profits have exceeded US$30 million and the company's direct investment in the country has reached US$116 million over the past three years.
Ren's words also resonate on a deeper strategic level.
Senior Forbes China editor Ada Qin wrote that the Australian market is crucial to Huawei's global strategy. If it retreats from Australia, Huawei may only play a passive role in the global market.
According to Huawei's 2012 Annual Report, the Chinese and European markets respectively account for one third of its global business income. Recent proposed EU anti-subsidy investigations against Huawei received little response and Huawei has begun to gain a firm foothold in the European market. Meanwhile, in Japan, Huawei has forged a close relationship with local telecom carriers.
By contrast, the U.S. government has not only closed its market to Huawei, but also labeled it a cyber security threat and the recent actions of the Australian government prove that the U.S. government sees Huawei as a threat.
In 2012, the Australian government blocked Huawei's tender to the US$36.2 billion 9th National Broadband Network (NBN) over alleged security risks, whereas Huawei had previously participated in the bid and construction of all eight NBNs. According to a report in the International Herald Leader, the Australian government consulted with the U.S. Central Intelligence Agency before making the decision. Clearly, it was influenced by its ally.
In order to enhance ties with the Australian government and increase its transparency in the local market, Huawei established the first overseas independent board of directors in Australia, with retired Rear Admiral John Lord taking the chairmanship of the board.
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